Gold, Silver and SP500 Trading Charts and Video

Last week was amazing for both gold and index traders as gold surged higher
and the SP500 tested a key resistance then fell 4% in our favor. The past couple
weeks with the mini market crash and Euro issues making the market extra volatile
both gold and the broad market (SP500) index has been wild.

The added volatility makes trading more difficult because price patterns become
less predictable and price movements are much larger increasing risk for traders.

Below are the charts & videos of what to look for in the coming days...

GLD - Gold ETF Trading

Gold continues to trend higher at an accelerated rate. Friday we saw gold
pullback and test a key support level then bounced to close in the middle of
the days trading range. As you can see the trend line support has become very
steep and once the trend line support is broken I figure there will be a sharp
drop to digest the recent rally.

SLV - Silver ETF Trading

Silver popped and tested a key resistance level from a previous high as expected.
It also tested the top of its trend channel providing even more resistance.
This week will be interesting as we wait to see if precious metals have a small
pullback or continue to rally.

SPY - SP500 Index ETF Trading Chart

This chart clearly shows what I think is about to unfold by looking at the
past market drop. Because of the mini market crash triggering everyone's stops
already I figure we have made the low and the dip we are seeing now will drift
down a few more percentage points then bottom out

ES M0 - SP500 Mini Futures Trading Setup - Pre-Drop

Below is a chart of the SP500 which we shorted or bought the SDS bear etf
trading fund last week looking to profit from a falling stock market. As you
can see from the chart we saw the es mini contract drift into a key pivot point
on light volume. What this means is that a large group of sellers will be waiting
at that price, and because volume is light we know there are not many buyers
at this price level. Simple supply/demand comes into play with more sellers
causing the price to stop rising and eventually force the price lower which
is what we were anticipating.

The green arrows show key support levels on the 60 minute chart where 1/3
of a position should be taken of the table to lock in gains which also reduces
overall risk on the trade. Once we cash in the first 1/3 of the position we
move our protective stop the breakeven which is the entry point for the remaining
portion of our position. This turns the trading into a winner no matter what
happens allowing us to enjoy the ride...

ES M0 - SP500 Mini Futures Trading Setup - Current Price

Here is the same chart 24 hours later showing both of our profit targets triggered
pocketing 2/3rds of our position for a very nice gain. Depending on the type
of trading vehicle you traded there was potential to make up to 150% return
in less than 24 hours.

We currently hold 1/3 of the position left with a loose stop allowing the
trade to mature incase the down trend continues for several days or weeks.
If not and the price rallies then our stop will get triggered for small profit
on the balance of the position. Either way we win.

Stock Market ETF and Futures Trading Conclusion:

In short, the market is trading on increased volatility making it difficult
to find low risk setups. At the moment we are long gold and short the SP500
with both position deep in the money. All we can do now is manage our positions
to make sure we maximize our profits.

Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized
market technical analyst and trader. Involved in the markets since 1997.

Chris' mission is to help his clients boost their investment performance while
reducing market exposure and portfolio volatility.

Chris is also the founder of TheGoldAndOilGuy.com, a financial education and
investment newsletter service. Chris is responsible for market research and
trade alerts for of its newsletter publication.

Through years of research, trading and helping thousands of individual investors
around the world. He designed an automated algorithmic trading system for the
S&P 500 index which solves his client's biggest problem related to investing
in the stock market: the ability to profit in both a rising and falling market.

AlgoTrades' automated trading systems allows
individuals to investing using either exchange traded funds or the ES mini
futures contracts. It is supported by many leading brokerage firms including:

He is the author of the popular book "Technical
Trading Mastery - 7 Steps To Win With Logic." He has also been featured
on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe
Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and
dozens of other financial websites. His list of personal and professional
relationships approaches 25,000, people with whom he connects and shares
is market insight with out of his passion for trading.

Chris is a graduate of Seneca College where he specialized in business operations
management.

Chris enjoys boating, kiteboarding, mountain biking, fishing and has his ultralight
pilots license. He resides in the Toronto area with his wife Kristen and two
children.